Moody’s Places Reliance Communications Rating On ‘Review For Downgrade’
Moody’s placed under “review for downgrade” the credit rating of Reliance Communications on Thursday, a day after the company’s announcement to merge its wireless telecom business with smaller rival Aircel.
In the largest consolidation in the country’s telecom sector, Reliance Communications and Aircel’s majority owner, Malaysia’s Maxis Communications Berhad (MCB), announced the signing of definitive documents for the merger of their Indian wireless businesses.
While we view the combination of the wireless businesses positively, we will also need to re-evaluate the credit profile of Reliance Communications n conjunction with the proposed organisational and financial restructuring, as the remaining business will be smaller in scale with - in our view - a weaker business risk profile.Annalisa Di Chiara, VP and Senior Credit Officer, Moody’s Investors Service
Moody’s has placed under review for downgrade Reliance Communications Ltd’s Ba3 corporate family rating and senior secured rating following the announcement of its plan to merge its wireless business with Aircel Ltd and its first quarter results for the 2016-17 fiscal, it said in a statement.